By AVA TURNQUEST and RASHAD ROLLE
FINANCE Minister Peter Turnquest yesterday insisted the country was one major hurricane away from “total disaster” as he defended the impending value added tax hike in the face of mounting calls for the government to reconsider.
After poll results indicated a wide majority of Bahamians oppose the 2018-2019 budget and the VAT increase, Mr Turnquest stressed the country could not continue to “borrow on our future”.
Meanwhile, Official Opposition Leader Philip Davis told The Tribune he feared there would be “grave unrest” given the concerns levelled by the business community over the shock increase, adding it was not too late for the government to “sit back, listen, and reverse itself”.
Mr Davis said he fully expected the government to continue its election campaign narrative of demonising the Progressive Liberal Party for its own incompetence.
A new scientific poll from marketing and research firm Public Domain, released on Sunday, revealed 76 percent of Bahamians opposed the 2018-2019 budget.
The poll results also show 73 percent of people generally oppose the VAT increase to 12 percent from 7.5 percent, 22 percent generally support it and five percent said they don’t know.
“It’s a poll,” Mr Turnquest said yesterday.
“The thing about polls is it really depends on who is taking it and what the questions are and the mood at the time. We understand that the increase of value added tax has taken some people by surprise.
“We understand there are those who are going to be upset and disappointed that they have more taxes being required of them, but the reality is that at the end of the day the Bahamian public ought to be really upset at the way we have allowed this unchecked spending, and unchecked borrowing to go on year after year, which has gotten us to this point where we are today.
“The reality is if we’re going to give ourselves a chance to be more progressive in the things and services that government provides,” he said, “as well as to be more holistic in the way we develop our country and be more inclusive. These are things we just have to face.”
The Minnis administration has faced considerable criticism over its decision to increase the VAT rate by some 60 percent from 7.5 to 12 percent without seemingly consulting stakeholders. Critics have also raked the FNM party over its staunch opposition to the introduction and administration of the tax under the former Progressive Liberal Party government.
Mr Turnquest previously defended the lack of consultation surrounding VAT’s increase, saying governments keep revenue measures close to the chest to discourage consumer behaviour that could upend government revenue projections.
Yesterday, Mr Turnquest insisted there was “no way we can continue to borrow.”
“The interest rate expense on these loans is going up astronomically,” he said. “It’s not even just the borrowing but the cost of financing the borrowing and I think people are missing that connection.
“We cannot continue to borrow on our future,” he said.
“Circumstances change. Things happen. We are only one major hurricane away from total disaster. We don’t need to get there to see what happens. We have examples around as to what happens.”
Mr Turnquest added: “I understand the polls if in fact they are accurate. Certainly we don’t question whether they are accurate or not, that’s really up to the public to decide. We know no one wants to pay taxes but it is a necessary element unfortunately of the government.”
For the scientific poll, which was conducted between June 2 and June 6, 800 respondents were selected by “random” telephone selection. The survey has a margin of error of 3.46 percent.
M’wale Rahming, president of Public Domain, said the results are the latest indication the Minnis administration is heading toward the “point of no return,” that moment when Bahamians’ disapproval of an administration may not be capable of reversal.
Yesterday, Mr Davis maintained the VAT increase was an outright betrayal of the electorate’s trust, telling The Tribune those results evidenced a sentiment his party believes has been growing steadily since the general election.
He confirmed his party will be supporting a march against the tax increase with the “We Rise” group on Thursday.
“But it was not unexpected,” Mr Davis continued, “because the lies they told on the campaign trail are catching up to them. They lied to them, sowed lies, and it is what will be reaped at the end of the day. I just admonish the government to listen to the voice of the people, otherwise this does not bode well for the stability of the country.
“When I talk to business persons they are all decrying this sudden increase. I think the government just has to sit back listen and reverse itself. It’s not too late, I portend grave unrest in the sense of the uncertainty of the business community, having been caught off guard in the way they have.
“At the last budget in June there is no foreshadowing of any increase. They just had a half-time report, a glowing report just six weeks ago about how what they’re doing is impacting the economy and then six weeks we’re struck with this? It’s deceit.”
Mr Davis added: “I doubt one can claim legacy in this regard, this is just a continuing campaign exercise where they had to demonise the PLP and blame them for what they are doing, but I think it’s their own incompetence.”